Mixed response to PNGRB's open access plan
Welcomed by some gas retail customers, the PNGRB draft guidelines ending CGD marketing exclusivity are unsurprisingly receiving strong opposition from CGD companies.
By September 24 (2024), the PNGRB received comments from 32 companies, including CGD players and industry stakeholders. Crucially, the PNGRB proposes to alter the definition of piped gas to exclude truck-mounted cylinders or LNG trucks, even though these were included in the definition during the CGD-IX and X rounds.
Think Gas responded by saying: "The bidding terms and conditions based on which the bids were called out cannot be changed after the grant of authorisation to an entity." Torrent Gas ED Utkarsh Bhatt responded: "The proposed change would not only take away the flexibility but also adversely impact the exclusivity of a CGD entity in providing CNG/LNG to customers in its authorised area."
The Association of CGD Entities said: "The proposed deletion of the phrase "or cascades or any other permitted mode" is expected to hinder the growth of the CGD sector significantly; currently, cascades and other modes like LNG tank trucks or tank wagons, serve as alternatives to traditional pipelines, especially in remote areas where pipeline infrastructure is not technically feasible or economically viable." Another change the PNGRB proposes is that customers needing more than 100,000 cm/d must not take the gas from CGD players but from gas transmission companies such as GAIL or Gujarat State Petronet (GSPL).
Until now, customers could take this amount of gas from either a CGD player or a gas transmission company. Rohan Sharma from Sabarmati Gas said: "This would result in the creation of a parallel CGD network in the same authorised area; these proposed amendments could also result in a dispute between a CGD and any new entity which intends to supply gas by laying a new network."
IOAGPL responded that the CGD entity should receive the first right of refusal for laying infrastructure in an area, failing which other companies can lay such pipelines. Megha Gas worries that the proposed amendments would "negatively impact planned investments."
Megha believes any changes "should be applied prospectively and not retroactively, as retrospective amendments could disrupt established rights, contractual agreements, and ongoing operations, ultimately affecting investment decisions."